Asset turnover ratio

Last updated: 25.03.2016

Asset turnover ratio is one of the indicators of activity, which shows how efficiently the company manages its assets and expresses what revenues will be brought by unit of assets.

Unlike ROA, Asset turnover ratio uses revenues in the nominator, ROA has a profit there.

 

Calculation formula

 

Assets are often the average from the beginning and final balance.

 

Comparison

between companies in different industries does not make much sense because the indicator is usually higher in companies with low asset volume and high sales, and vice versa.



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